* * * * * * * * TERRIE’S (TOURISM) TAKE – BY TERRIE LLOYD * * * * * *
A bi-weekly focused look at the tourism sector in Japan, by Terrie
Lloyd, a long-term technology and media entrepreneur living in Japan.
(http://www.terrielloyd.com)

Tourism Sector Edition Sunday, Feb 03, 2019, Issue No. 978

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+++ Japan’s Departure Tax – The Perfect, Stealth Grab for Half a Billion Dollars

From Monday January 7th, Japan introduced its first new tax in 28
years (the last one being a land value tax in 1992), which is a
traveler departure tax of JPY1,000 per passenger aged two or older and
who is not in the armed forces, government, or other exempt category.
The new tax will apply to about 50m people annually, being
approximately 17m Japanese heading overseas for business and pleasure,
oh, and of course not forgetting the 32m (estimated) foreigners who
will be traveling to Japan this year. As far as taxes go, this one has
attracted very little criticism or commentary, probably because for
the average voting Japanese, overseas trips are synonymous with luxury
lifestyles and so who could complain about an extra thousand yen
tagged on to a trip that will probably cost hundreds of thousands
more?

There is also the fact that many other developed countries already
charge departure taxes, including Australia, whose Passenger Movement
Charge (PMC) of AU$55 is one of the highest in the world, and the UK’s
Air Passenger Duty (APD), which is probably the second highest, coming
in at 13 pounds per economy class passenger and 26 pounds for other
classes. Both Australia and the UK introduced their taxes nominally to
“improve” customs and immigration processing for visiting tourists,
but as personal experience will vouch, it is really just another way
of scalping tourists who are not in a position to fight back
politically (although they can stay away – more below on this). So it
seems that Japan is simply borrowing international precedents to
establish its own little tax pin prick, and it’s likely that just as
with the other two destinations mentioned, the tax will continue to
tick upwards from here. Indeed, in the UK, the original traveler tax
started out at 5 pounds and is now almost triple that.

The most disturbing thing about Japan’s new travel tax, though, is the
extraordinary opaqueness of what the tax will be used for. Estimates
are that the new tax will net about JPY50bn in new income for the
government, and the powers that be have mumbled that they will apply
that cash for “smoother travel services, improving information
services, and facial recognition gates at air and seaports”. OK… so
are we saying that we need about US$500 million PER year for
electronic gates, free WiFi, and electronic payment systems? I’ve used
the “automatic” immigration gates that are already there – and as a
registered user I can tell you that they are almost useless. They do
nothing other than automate the taking of photo and finger prints,
after which you still have to talk to an bored official who then
re-checks your paperwork. Indeed, for the paper-obsessed Japanese, it
is hard to imagine the bureaucracy trusting AI and facial recognition
to process a foreigner leaving the country.

[Continued below…]

———- Japan Rugby Accommodation Challenges? ———-

If you’re like us, you probably left it to the last minute to get your
Rugby World Cup tickets. And now you have them, your next challenge is
going to be finding somewhere to stay both for the games, and in
between as well. Yep, because in its efforts to spread the goodwill
around, the Japanese rugby folks assigned the preliminary round
matches to some very, very small towns, all around the country. As
other ticket holders are now discovering, finding somewhere to kip
down is hard.

That’s where Japan Travel comes in. We’re one of Japan’s few
foreign-owned Type-2 licensed travel agencies, and our specialty is
finding solutions to your problems. Need somewhere to stay near Oita
or Kamaishi? Why not avoid the crowd and simply rent a car-and-support
package through us, allowing you to pick any one of a number of other
towns in the area to stay in. Or, if you want to be close to the
action, what about renting a motor home or even a tent, and having
local food catered in?! We can offer you a multitude of options and
make your stay in Japan a memorable one. Just tell us your challenge
and your budget range.

For rugby travel assistance, contact us at: tours@japantravel.com. Or
visit our pages at: http://japantravel.co.jp/en/about/travel-agency/
———————————————————–
[…Article continues]

The reality is that this is a tax on people who can’t complain about
it because 70% of them are not citizens or tax payers, and those who
are, well they are in the minority being rich enough to travel
overseas – so they’re likely to want to stay quiet. This has meant
that the politicians have made no effort at all to justify the tax
grab. Hmmm, so just where is the money really going? It seems that
each new media report has a different shopping list. Some are talking
about town infrastructure, like the WiFi I mentioned previously, while
others seem to be talking about IT systems and further encroachment by
government on business services that ideally should stay in the
private sector. When I’m out in the regions, I’m hearing murmurs of a
desire for local tourism entities to tap in to those funds for
marketing and websites. And no doubt there will also be some for NPOs
that support volunteer guides and translators.

Oh, and what about more electronic notice boards and surveillance
cameras? You can never have too many of those – especially when
Japanese electronics manufacturers can’t find anyone else to buy their
overpriced stuff anyway… With JPY50bn every year – or perhaps
JPY100bn by the time the government has jacked up the fees several
times – it seems to me that there is going to be a big chunk left over
with no one to claim it. That means we’re in for some serious partying
and overpriced projects by the old boys in the tourism sector and very
little of practical use to tourists themselves. So what else is new?
Petrol taxes and motorway tolls around the country have long exceeded
the cost of running the country’s infrastructure, and yet no one seems
to care enough about it to create a fuss. Instead, people have slowly
just stopped using cars, and the amakudari guys have gotten fat on
entertainment expenses.

Which leads us to the second big question – whether departure taxes
are a risk-free revenue source or whether they will actually damage
the inbound travel business? A study done last October (2018) by the
Austrian Institute of Economic Research and the University of Iceland
found that after Germany and Austria introduced a departure tax in
2011, the number of passengers fell by 9% in the year of introduction
and 5% a year thereafter. Most affected were the Low Cost Carrier
(LCC) airlines and the airports that served them. Likewise, a separate
study also done in 2018 found that a Norwegian departure tax of NOK80
introduced in 2016 caused the Irish LCC Ryanair to stop using a local
airport in Oslo, Rygge, and because of the loss of business the
airport subsequently had to close to civil aviation operations…!
Talk about cutting off your nose to spite your face. I can think of a
number of secondary airports in Japan that might suffer a similar fate
– such as the Ibaraki airport, currently a base for China’s Spring
Airlines. Likewise Takamatsu, Matsuyama, Kumamoto, and probably 20
others.

Separately the International Air Transport Association (IATA) has
calculated that if Australia abolished its PMC fees, tourism would
increase by around AU$1.7bn, almost 6 times more than the current
AU$485m the tax brings in. It would be interesting if IATA did a
similar study for Japan.

http://bit.ly/2RztuDz [Study on German, Austrian travel fall-off after
Departure Tax was introduced.]

…The information janitors/
***********************************************************

——— Japan Travel Corporate Travel Services ———-

Japan Travel’s Type-2 licensed travel agency business is one Japan’s
few independent foreign-owned inbound DMCs. One of our specialties is
looking after corporate groups of 10-300 people. To date we have
assisted in the successful holding of training events, incentive
travel, conferences, off-sites, and team bonding programs. We have
looked after the full gamut of services, such as: international air
travel, hotels, local travel, event logistics and venues,
entertainment, micro-management of dietary needs, and special needs
customers.

We are highly motivated and are happy to work in a variety of roles
tailored to suit your needs: as a full-fledged corporate travel agency
partner, as a logistics partner for a particular issue, or as a source
of innovative experiences and venues. Looking after hard-to-please
high-tech groups is our specialty!

For corporate travel assistance, contact us at: tours@japantravel.com.
Or visit our pages at:
http://japantravel.co.jp/en/about/travel-agency/
———————————————————–

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END

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+++ ABOUT US

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Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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